Regarding Adani Power share price

Planning to invest the share market? Looking out for financial advice regarding whether to invest in a particular share? Find advice from experts on this page for your concerns.

I have bought 673 shares of adani power@ 19.23 average price. Now the share market price is 19.45. Can I hold the shares for long term and what price can we expect in future?I am a beginner in the share market. Kindly advise.

Thanks & Regards

V.Praveenkumar

Answers

73% of money controllers are recommending to purchase these shares as of now. Another point is presently the stock market is a little on the lower side. There are every chances that the prices of shares will again go up. Only thing is we should have patience. As already you have purchased the shares I advise you to wait for some time and observe the market trend. Shortly the rates may go up. Then you can think of selling. As of now my advice to you is to wait.

It is impossible to explain everything, you need to do your own research before buying a share.

1. As of the closing bell on Friday 15th June, the share price of Adani power is 18.35. There would be little point in trying to sell it now. My suggestion is hold it for a while and see the trend and watch out for news about the company itself.

2. Before buying a share, the basics to check would be the company's sector, reserves, debt, current demand, liabilities, the market cap of the company, PE ratio and PB ratio, 52 weeks high and low, daily tradings, good/bad news.

3. The price to book value or ratio is still one of the best tools to tell us about the script. This is arrived by dividing the current price by the book value of the stock (this can be found in any stock site).

4. A simple brief analysis would be based on the critical factors

i)Sector: Power - good to invest

ii)Competitors: there are plenty (https://www.moneycontrol.com/competition/adanipower/comparison/AP11),

iii) PE ratio Is in negative for Adani Power (means company is losing money), the earnings per share will be in negative which means a loss. The industry PE ratio is 11.73

iv) PB ratio 8, this means the share is overvalued or investors are expecting a good return.

v)52 week high and low (17.15-47.80), Since Jan 2018, this share is on a downward trend and it seems that you could have been trying to catch a falling knife by regularly buying to average your price.

vi)Market depth: On Friday around 30 thousand shares were bought, 20 thousand were sold. If there are more sellers, then expect the price to drop further in the next day or two, if the buyers are more, then there is some interest in the share and hopefully, it will go up. Again be aware that this buy and selling is not all related to people like you and me who buy to hold, this would include day traders etc.

5.Based on this, I would not invest much in this company, the price would be driven up or down by big players/traders who look at short-term profits. I would expect the share price to slowly drop further when it reaches around 15/16, I would gradually buy more to average the price and hold it.

6. Averaging, holding, selling depends on your risk appetite and time horizon. Once I average to drop my average buy price more closer to 15/16, then I would hold for a few months when I get a 15% profit, I will sell.

I would think of selling because the price depends on the coal, the oil price etc. The other reason to be cautious for me would be that the Adani group is considered to be a major contributor to the NPA related to public sector banks (see Subramaniyam Swami's statement from March this year about Adani).

Subscribe to Email

About IndiaStudyChannel.com

Being the most popular educational website in India, we believe in providing quality content to our readers. If you have any questions or concerns regarding any content published here, feel free to contact us using the Contact link below.